US-based cancer drug developer Neon Therapeutics went public on Wednesday in a $100m initial public offering that scored exits for diversified conglomerate Access Industries and pharmaceutical firm Pharmstandard.
The offering consisted of 6.25 million shares issued on the Nasdaq Global Select Market priced at $16.00 each, in the middle of the IPO’s $15 to $17 range. The shares opened at $15.65 on Wednesday and closed at $13.48 last night.
Neon is developing immuno-oncology therapies meant to fight cancer by directing the body’s immune system to neoantigens, an element of cancer cells that can be caused by genetic mutations.
About $40m of the IPO proceeds will fund the clinical progress of Neon’s personal neoantigen vaccine, NEO-PV-01, which is currently in a phase 1b trial.
An additional $40m will support preclinical work on other candidates including the initiation of a phase 1 clinical trial for a personal neoantigen T cell therapy known as NEO-PTC-01.
Neon had raised $161m across two equity rounds, initially getting $55m in a 2015 series A led by $45m from Third Rock Ventures and backed by $5m each from Access Industries and Clal Biotechnology Industries, the investment holding firm 49.9% owned by Access.
Both Access and Third Rock returned for the company’s series B round, which closed at $106m in December 2017.
Pharmstandard, Fidelity Management & Research, Partner Fund Management, Wellington Management Company, Inbio Ventures, Arrowmark Partners, Nextech Invest, Hillhouse Capital Group and Casdin Capital also took part in the series B.
Third Rock remains Neon’s largest shareholder post-IPO, with a 34.5% stake diluted from 44.4%. Other notable investors post-offering are Access (9.9%), Fidelity (5.8%) and Partner Fund Management (5.3%).
Morgan Stanley, BofA Merrill Lynch and Mizuho Securities are joint book-running managers for the IPO while Oppenheimer is lead manager. They have the 30-day option to buy almost 940,000 more shares, lifting the offering to $115m.